On Friday, MongoDB Inc. (NASDAQ:MDB) shares surged more than 26% after announcing its most recent quarterly results. The company reported its fiscal Q2 revenue and earnings Thursday after markets closed beating analyst expectations.
The company’s non-GAAP loss per share increased on a year-over-year basis to $0.24, significantly lower than the expected loss of $0.40 per share. GAAP EPS of -$1.22 was also better than the consensus Street estimate of -$1.25, while revenue for the quarter soared 47.3% to $199 million, driven by Atlas revenue, which grew 83%. The market was expecting a top line of $182 million.
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Moreover, MongoDB issued Q3 revenue guidance in the range of $202 million to $204million, compared to the average analyst expectation of $198.26 million. The company now expects full-year 2022 revenue at about $805 million to $811 million, substantially higher than the Street forecast of $786.35 million.
Is it too late to buy MongoDB shares?
MongoDB shares now trade at a steep P/S ratio of about 36.95 following its solid Q2 results. Moreover, despite the increased revenue, the company forecast its net loss to continue growing in the coming quarters, pushing back its turnaround date.
However, investors seem to be betting on the potential growth MongoDB offers after adding thousands of customers for its growing cloud database, MongoDB Atlas. Furthermore, the company could break even sooner than expected if it continues to outperform expectations.
Therefore, although the stock appears substantially overvalued, growth investors could look to buy ahead of next year’s bottom-line growth.
MongoDB faces solid trendline resistance
Technically, MongoDB shares seem to have recently spiked to trade at a new all-time high of $508.97. As a result, the stock has now surged to overbought conditions of the 14-day RSI, leaving little room for more upward movement.
Moreover, the MDB stock price appears to be facing solid trendline resistance in the intraday chart, creating the perfect situation for a pullback. Therefore, investors can target potential short-term pullbacks at approximately $462.89 or lower at $424.92, while $544.37 and $580.48 are potential resistance zones.
Bottom line: MongoDB pullback seems inevitable despite its exciting growth potential
In summary, although MongoDB’s growth prospects appear to be improving, the stock seems steeply-priced after Friday’s post-earnings spike. Moreover, shares have surged to overbought conditions and seem to face trendline resistance.
Therefore, it could be time to take some profits from the MDB shares or wait for the stock to retest a key support level before buying.
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